Hi Ho, Hi Ho, It’s Off to 2020 We Go; Let’s Talk Sustainability in 2019

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As the year ends, Flat World Partners is encouraged by the rapid development of sustainable investing across asset classes. Our team is particularly proud and excited to be moving the needle on ESG integration in the hedge funds space with our partnership with Titan Advisors, recently announced. Moreover, our environmental data is improving in both quality and speed to help match the clarity we already have in financial data. All the while 78% of asset owners consider ESG management to be one of the key issues they now look at when choosing an asset manager, according to a survey from Responsible Investor. The trend has helped pool nearly $30 trillion in responsible assets according to GSIA data as of last year. Meanwhile, asset managers have taken steps to keep themselves accountable, through signing the IFC Principles of Impact investing, in order to better align promises with measured results.

In 2019, the hastening awareness of sustainability issues has been mirrored in our conversation around climate. In fact, language (English at least) is adapting quite literally. Oxford named “climate emergency” as its 2019 Word of the Year. The use of the term increased a hundredfold in 2019, leading a “demonstrable escalation” in the language around climate, according to Oxford Dictionaries. “Climate emergency” was the most common compound involving “emergency,” occurring three times as often as the next most-common, “health emergency.”

The emergency has not yet translated fully into our politics — at least in the U.S. context. In November, President Donald Trump officially withdrew the U.S. from the Paris Climate Accords while also encouraging the Environmental Protection Agency to block the state of California from enforcing stricter tailpipe emission standards.

But where governments have lagged in addressing our common climate emergency, in 2019 a young climate activist has taken the charge. Greta Thunberg — Time Magazine’s person of the year — began a global movement by skipping school to protest in front of the Swedish Parliament, camped out at Davos to protest world leaders, addressed heads of state at the U.N., met with the Pope, and sparred with the President of the United States via Twitter. What Greta has shown us is that perhaps the youth of today can lead the politicians of tomorrow into a more sustainable world.

Addressing our climate emergency is a critical part of sustainable development, but economic development that lifts billions out of poverty is also crucial to a sustainable world. There are only 10 years remaining to meet the 17 UN Sustainable Development Goals, which require collective action from all stakeholders. Developing countries are particularly vulnerable when it comes to accessing healthcare, education, and good paying jobs across their societies, however we are hopeful that we will continue to make traction in 2020.

As this year concludes, we wish you a Merry Christmas & Happy New Year from the whole Flat World team! See you in the next decade.

Derek Brooks, Asset Management

Fueled by the era of very low interest rates, total debt has rocketed to 170% of emerging markets’ gross domestic product, a 54%-point increase since 2010 — according to the World Bank. Such debt load poses risks of economic shock, especially if borrowing is not geared to investment for the long term.

Installing solar panels in a home not only helps to reduce current monthly utility bills; it can potentially increase the home’s value by up to 4.1% more than comparable homes with no solar panels, according to Zillow.

Some of you Christmas Scrooges out there might be asking: how economically efficient is Christmas gift-giving anyhow? Last year Bruegel’s Silvia Merler reviewed the controversial topic of the dead-weight loss of Christmas. Bah-humbug!

This newsletter is intended solely for informational purposes, and should not be construed as investment/trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any securities mentioned. Any reproduction or distribution of this document, in whole or in part, or the disclosure of its contents, without the prior written consent of Flat World Partners is prohibited

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